Click here to see our "Understanding the 2.2 Benefit Formula" brochure for more information on the 2.2 formula.

Do I qualify for 2.2?

You qualify if you were not retired on May 27, 1998. The 2.2 formula applies to service earned and credited on or after July 1, 1998. You may upgrade pre-July 1998 service by making the voluntary contribution.

I stopped teaching some time ago, but I did not take a refund of my contributions. Can I upgrade to the 2.2 formula?

Yes, if you have not yet begun receiving a pension and your retirement date is on or after May 27, 1998. However, you must make the voluntary upgrade contribution if you want your pre-July 1998 service to be covered under the 2.2 formula. Please call TRS for a benefit estimate to determine if the upgrade is necessary.

Do current members have to make a payment to upgrade to 2.2?

The upgrade is voluntary. The upgrade cost is 1 percent times the number of pre-July 1998 service years times your highest salary in the four years before making application to upgrade (not including the current school year).

The maximum charge is 20 percent or 20 years times the 1 percent contribution rate. Each three full years of service after June 1998 reduces the number of years to upgrade by one year.

If I want to upgrade my previous years of TRS service credit, do I have to upgrade the entire amount or may I elect to upgrade only a portion?

You must upgrade all pre-July 1998 TRS service credit up to the maximum of 20 years.

Why would I want to upgrade now when I don’t know how many more years I will teach?

The highest salary rate in the four years prior to making application to upgrade will be used to determine the upgrade charge (not including the current school year).

Salaries of most educators increase annually. You will likely pay a smaller amount if you pay sooner rather than later. If you earn additional credit after upgrading, your upgrade will be recomputed and any savings will be refunded with regular interest (currently 6 percent) when you retire.

The decision on when to upgrade will depend on individual circumstances and should be carefully considered by everyone.

What salary will be used to determine the upgrade charge?

The highest salary rate in the four years prior to making application to upgrade will be used to determine the upgrade charge (not including the current school year).

For part-time employees (less than four clock hours per day, five days per week or more than four clock hours per day but not five days per week), the cost will be based on the earnings that are recorded with TRS. For substitute and hourly employees, the cost will be based on an annualized salary (by dividing earnings by service credit).

Can I elect to upgrade to the 2.2 at anytime before I retire?

Yes, but the cost may be based on a higher salary.

What is the forgiveness feature?

For every three full years of service credit earned after June 30, 1998, the maximum upgrade cost is reduced by one year or 1 percent. For example, a person with 20 years of pre-1998 service who works six years after June 30, 1998, would pay an 18 percent upgrade charge instead of a 20 percent upgrade cost.

Does my year of sick leave credit count towards the forgiveness feature?

No. Amounts credited for unused, uncompensated sick leave are excluded for all upgrade purposes. You don't have to upgrade the sick leave credit, and it does not count towards the forgiveness feature.

What if I upgrade now but teach at least three years after June 1998?

At retirement, the contribution will be recalculated. If the amount you paid for the upgrade exceeds the recalculated amount, TRS will refund the difference to you with interest.

What do I need to do to start paying for the upgrade?

Call TRS to elect the upgrade. A letter will be sent to you verifying that you have elected to upgrade and will ask how you wish to pay.

What if I decide to teach beyond 34 years and have already upgraded to the 2.2?

For each year beyond 34, you will receive a 25 percent refund of the 2.2 upgrade charge with interest when you retire.

If I elect to purchase additional outside service credit (e.g., maternity leave, substitute time, military), will that additional time be computed at the 2.2 percent rate?

Yes. If you upgrade fewer than 20 years of service and then purchase additional service, you must upgrade the additional service to the 20 years if it occurred prior to July 1, 1998.

If I have already purchased additional outside service credit, must I "upgrade" that service to the 2.2 percent rate?

Yes. However, if you have upgraded 20 years, there is no additional charge to upgrade years of pre-July 1998 service in excess of 20 years.

If I have unused sick leave days when I retire, will they also be computed at the 2.2 percent rate?

Yes. If you have 24 or more years of service credit on June 30, 1998, and do not upgrade your pre-July 1998 service credit, sick leave will be computed at 2.2 percent if your total service credit is 30 or fewer years and at 2.3 percent if your total service credit is greater than 30 years.

Do I have to upgrade my reciprocal service with Public School Teachers' Pension and Retirement Fund of Chicago?

No, but you may wish to. If you have service with Public School Teachers' Pension and Retirement Fund of Chicago, you should contact that system regarding the upgrade of your Chicago service.

At what point do I pay taxes on the 2.2 upgrade contribution?

If you paid for the 2.2 upgrade through the Payroll Deduction Program, the upgrade cost will be included in that part of your TRS benefit which is subject to federal taxes when you retire. If you make a lump-sum payment using post-tax dollars, the amount will be proportionally excluded from taxation over your IRS-estimated life expectancy. If you are paying for the upgrade via the 24-month pension reduction, the reduction amount is considered non-taxable.

Can my employer pay the 2.2 upgrade cost for me and have it be creditable earnings?

Yes, but the employer-paid 2.2 contribution must be paid on or before your last regular paycheck.

If my employer wants to pay my 2.2 upgrade cost, must my employer make payment in a lump sum?

Yes. Your employer may make up to five annual lump-sum payments provided that the deadline for the payment of your upgrade balance is observed.

If I have fewer than 30 years of service as of July 1, 1998, and do not upgrade but have optional service included after that date to get me to 30 years (as of the July 1, 1998, date), will I then receive the 2.3 percent for remaining years?

Yes. You will, at retirement, be able to get 2.3 percent of average salary for those years over 30.

Click here to see our "Understanding the 2.2 Benefit Formula" brochure for more information on the 2.2 formula.

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